Prospects for any imminent settlement of a contentious power lawsuit involving the province and city-owned Enmax appear slim as Mayor Naheed Nenshi renews his call for the NDP government to drop its legal action.

Since November, the government has reached agreements with AltaGas, TransCanada and Capital Power in the legal dispute relating to their relinquishment of power purchase arrangements (PPAs) for coal-fired electricity to the Balancing Pool, an independent government agency.

But there’s no deal with Enmax and Nenshi recently told Postmedia the issue remains a major sticking point between the city and the Notley government.

“They really, really, really need to abandon their lawsuit on the electricity stuff, on the power purchase agreements,” he said.

“They made a terrible mistake and I hope they can admit that and we can move forward and build a new, greener electricity grid together.”

Mayor Naheed Nenshi says the lawsuit against Enmax remains a sticking point between the city and the Alberta government.Lyle Aspinall /
Postmedia Network

Starting in December of 2015, Enmax, TransCanada, ASTC Power Partnership (an association between TransCanada and AltaGas) and Capital Power have returned money-losing PPAs to the Balancing Pool, citing the government’s Jan. 1, 2016 increase in the carbon levy on large greenhouse gas emitters as the cause.

The PPA holders used an opt-out provision that allows the companies to terminate the agreements if any change in law makes the deals unprofitable or “more unprofitable.”

But in July, the government filed suit to have the “more unprofitable” clause declared void, claiming it was unlawfully enacted under the previous Progressive Conservative government at the behest of defunct Enron Corp.

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The settlements reached with the energy companies see them relinquishing the PPAs but making a payment to the Balancing Pool. The agency will still sustain losses from the cancelled contracts, with one analyst estimating the price tag at about $500 million.

The government and Enmax are in communication and in November, Premier Rachel Notley said the two sides were getting “reasonably close” to an agreement.

On Friday her spokeswoman, Cheryl Oates, reiterated that position despite Nenshi’s comments.

“We are optimistic and we continue to work with Enmax, hoping we can reach a deal,” said Oates.

On Thursday, the Wildrose asked Auditor General Merwan Saher to investigate what it says is improper — and potentially illegal — interference by Notley and the NDP government in the operations of the arms-length Balancing Pool.

Internal documents and emails obtained by the Opposition through freedom of information requests show Balancing Pool officials repeatedly warning that the organization would become insolvent by the end of the year because of the PPAs. While the agency wanted to scrap the existing consumer allocation — a monthly payout to Alberta residents and business — and implement a consumer charge to avoid default, officials in the documents discuss the NDP government preventing them from taking that action, at a $17-million monthly cost to the agency.

The documents obtain an email where officials discuss waiting for Notley herself to make a decision on the consumer allocation.

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If it wasn’t so darn important to our city, there’d be some degree of smug satisfaction with the awkward position in which both the premier and prime minister now find themselves embroiled in with this whole pipeline brouhaha.